Australia has concluded a free trade agreement with the European Union following eight years of negotiations, creating new conditions for trade with a market of around 450 million consumers. The agreement will result in 98 per cent of the current value of Australia's exports entering the EU duty-free, including fruit and vegetables.
Australian producers will benefit from the elimination of most EU tariffs on these products, while additional access will be provided through tariff rate quotas for products such as sugar, rice, wheat gluten, skimmed milk powder, and natural butter. Tariffs on Australian onions, carrots, and potatoes will be removed, and duties on beans and fresh sweetcorn will be phased out over three years.
The deal is expected to influence trade flows in the vegetable sector. Australia exported around 10,000 tons of onions worth $11 million to Europe in both 2023 and 2024, before volumes declined to 5,300 tons worth $5.8 million in 2025 following increased competition from New Zealand after its own EU agreement. New Zealand exports rose from 42,800 tons in 2024 to 46,500 tons in 2025.
AUSVEG stated that the agreement could support recovery in Australian onion exports and improve competitiveness for vegetable exporters. "The Australia-EU FTA will not only provide opportunities for onion grower exporters to recover recently-lost market share, but also gain new ground through more competitive international trading terms."
However, the agreement has received criticism from parts of the agricultural sector. The National Farmers' Federation said the deal does not deliver commercially meaningful market access gains compared to earlier negotiations. "Australian farmers are extremely disappointed that negotiations for a free trade deal with the European Union (EU) have concluded without commercially meaningful agricultural market access gains since Australia last walked away from negotiations."
The Victorian Farmers Federation also raised concerns about market access and competitiveness. "Australian agriculture is a net exporter, and the market access numbers simply don't stack up."
The agreement also includes provisions on geographical indications, allowing continued use of terms such as parmesan and prosecco in Australia, with phase-out periods for certain names. In addition, reduced tariffs on EU imports are expected to lower prices for products such as wine and processed foods in Australia.
Beyond agriculture, the agreement will improve access for Australian service providers and allow companies to participate in EU government procurement markets. Investment flows are also expected to increase, with the EU already the second largest source of foreign investment in Australia, valued at $869.3 billion in 2024.
The agreement will enter into force once both parties complete domestic approval processes.
Sources: NFF, AUSVEG, Prime Minister of Australia, Victorian Farmers Federation
